What The Drop in Unemployment Means--Or Doesn't Mean--For Kentucky

A Kentucky economist said the state isn’t seeing the kind of employment growth it needs to make up for recession-era job losses.

The national unemployment rate fell one-tenth of a percentage point in May compared to April. Jason Bailey, with the Kentucky Center for Economic Policy, said rural parts of the commonwealth are still struggling. He cited a loss in coal mining and manufacturing jobs over several years.

Bailey said the celebration of small improvements misrepresents the reality of Kentucky’s employment picture.

“You don't measure the strength of an economy by how many blue ribbon or ribbon cuttings you hold. You measure it by how many people are working. And so these numbers over time will be important to bringing some reality to what's actually going on,” Bailey said.

Bailey points to monthly employment reports that show job growth in Kentucky has remained virtually unchanged since January. He said the commonwealth isn’t seeing the robust or consistent job growth it needs.

Bailey said Governor Matt Bevin’s habit of saying the state’s recently-enacted right-to-work law is behind an explosion of jobs doesn’t represent the reality in the commonwealth.

“In fact if you look at the monthly job growth in Kentucky, there’s been no acceleration from what was happening before,” Bailey said.

Right-to-work prohibits unions from being able to collect what are known as “fair share fees”. Those fees are imposed on non-union employees in exchange for the benefits of being in a unionized workplace. Kentucky’s right-to-work law was signed by Governor Bevin in January.

A state-specific jobs report for the month of May will be released later this month.

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The Ohio Valley region once helped give rise to the labor movement. Now it’s shifting toward what’s known as right to work. West Virginia and Kentucky have passed right to work laws, and Ohio is considering a similar bill. One of the big selling points for right to work proponents is that the law can attract new businesses. Opponents argue that potential comes at too high a cost to workers.

Mike Mullis is a site selection consultant who has spent 25 years helping global corporations, such as Toyota, pick the places where they will build major projects. He said some companies – particularly in manufacturing – will perk up when they hear the words “right to work.” However, that doesn’t mean businesses will come flocking to a state.

Temporary work is the fastest growing industry in Kentucky. Clerical work may come to mind when you think about temporary agencies, but that’s a bit of a misnomer these days. An increasing number of manufacturing positions are being filled by temporary agencies.

At Quality Personnel in Bowling Green, a marquee advertises the most recent job openings. One of those is for an automotive supplier, just what Aaron Rinehart is seeking. When he moved from Ohio to Kentucky, he said that he used the same agency to find work. Rinehart said he understands why most factories only hire through temp agencies, but he feels it still hurts the people who want full-time work.

“Not much of a choice really. It’s hard to get on anywhere full time now a days, companies don’t wanna just hire people through the door. So the only way to get on now a days is to go through a temp agency, and put your 90 days of work in, and basically just hope you get hired on after that,” Rinehart said.

Kentucky’s Attorney General Andy Beshear said the state’s new right-to-work law is an example of misplaced priorities. In a recent visit to Western Kentucky University, he said the law won’t lead to the job creation its supporters are seeking.

Supporters of right-to-work say it will help Kentucky compete against other states for new jobs.

Right to work allows employees to work in unionized facilities without paying union dues. Unions are still legally responsible for collectively bargaining for all employees, and defending all employees in the event of a grievance. Beshear believes right-to-work is bad policy.

“I wanted to be Attorney General to better protect families, and all right-to-work does is pay our working families less,” Beshear said.

Beshear pointed out Kentucky won Site Selection magazine’s “Governor’s Cup” award for its number of capital investment projects in both 2014 and 2015. The Attorney General said that shows the state was capable of competing for jobs and industry without right-to-work.

McKenzie Cantrell is an employment lawyer affiliated with the Maxwell Street Legal Clinic, in Lexington, Kentucky, where she works with low-income refugees and immigrants to uncover instances of wage theft and income disparities. Cantrell, who is also a state representative for part of Jefferson County, Kentucky, travels and gives presentations about employment law, wage theft and what workers' options are if they have problems with compensation.

“Sometimes you can just see on someone’s face, the fact that they have lost money over the course of their career, and it really affects you as someone who doesn’t want to see working people lose money and struggle in a low-income job,” Cantrell said.

Many of Cantrell’s clients work in the service and construction sectors, and many are women and minorities.

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A court of appeals ruling last week that cleared the way for right-to-work legislation in Kentucky may not be the final word.

The News-Enterprise in Elizabethtown reports the Louisville law firm representing nine unions against Hardin County plans to petition to re-hear the case.

Right to work laws lift mandatory union contributions for new hires. Unions say the law weakens them, allowing workers to get union benefits without having to pay for them.

Hardin County was one of 12 Kentucky counties that passed the legislation last year.

The unions say only states, not counties, have the authority to pass right to work laws. Their lawyer says the three-judge court of appeals misapplied two Supreme Court decisions and took them out of context.

They plan to file a petition within the required 21 days for the full 15 member appeals court to re-hear the case.